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The Effects of Top Management Team Pay and Firm Internationalization on MNC Performance
Mason A. Carpenter
School of Business, University of Wisconsin-Madison, 975 University Avenue, Madison, WI 53706, USAmcarpenter{at}bus.wisc.edu
Wm. Gerard Sanders
The Marriott School, Brigham Young University, Provo, UT 84602, USAgsanders{at}byu.edu
We examine relationships among top management team (TMT) compensation, a firms degree of internationalization (DOI), and its subsequent levels of market and accounting performance. Consistent with our contingency view of information-processing theory, we find that non-CEO total pay and the use of long-term incentive pay are positively associated with subsequent performance, whereas the CEOTMT total pay gap has negative effects on firm performance. CEO pay has no relationship with performance and TMT pay effects are much stronger in MNCs with high DOI.
Journal of Management, Vol. 30, No. 4,
509-528 (2004)
DOI: 10.1016/j.jm.2004.02.001

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